Mis-sold Spanish mortgages

I have posted this query on general Chit Chat as well, but think i might get a better answer from a professional on here???

Just been out in Spain and i'm reading and hearing a lot of adverts for lawyers willing to chase mis-sold mortgages in Spain after an EU ruling..

this is what happened...

Many Spanish Banks will face a bill of €5bn after a Spanish Court ruled that millions of fixed minimum rates sold during the property boom are null and void due to a lack of transparency.

The mortgages contain what is known as a ‘clausula suelo’ which fixes the minimum mortgage payment. Therefore, the product is still a variable rate mortgage but the Bank sets a cut-off point below which your mortgage repayments will not fall.

It is estimated that 40 Banks are involved including pillar lenders. The clauses were put in to protect banks from negative interest rates, which we have seen come into play this year.

Most of the 4 million mortgages estimated to be effected by this ruling were sold during the 1997-2007 property boom when buyers were paying over the top prices for property throughout Spain.

Whilst the ‘clausula suelo’ type of mortgage is not outlawed, the court has said the existing mortgages sold are null because of a lack of transparency on the part of the Banks, which failed to adequately inform clients what they were signing up to.

Only 15,000 homeowners who were part of the class action which took this matter to court are aware of this ruling and this leaves upwards of 3.75 million people who could benefit from this ruling, including overseas borrowers.

Our repayment mortgage started back in 2005 and the interest rate is changed annually and we have no options to change banks and  remortgage to a lower rate, which seems to fit the criteria for mis-selling.

However, our initial mortgage bank HalifaxUK changed to Banco Halifax Hispania, which then was sold to LLoyds Bank and finally onto Banco Sabadell. 

Sabadell are obviously "Holding the Baby" if there are any mis-selling issues for all these old banks customers, and when i went in to discuss the situation with them one branch claimed not to have heard anything about the EU legal ruling in Spain, the other branch said it was an English mortgage anyway so the rules didnt apply, however Banco Halifax - is a separate company to its UK counterpart and its mortgage products are subject to the regulations and requirements typical of all Spanish mortgages.

So are Sabadell being clever and trying to put claimants off - or are they telling the truth?

Has anyone started a claim yet?

Who did you use, expected % fees the are looking for and how has the experience been so far?

Look forward to hearing from people in the same boat!

Whoever benefitted from the fixed interest rate is risponsable of the refund. If both entities still exist, my advise is o claim against them both

Thank you Maria - will do

Can you also give me your thoughts and comment on my other query of the day in the Running a Community section

question is  - Can we double the community fees at an AGM?

I have been a mortgage broker in Spain since 2003 and when Halifax used to operate in Spain AS FAR AS I AM AWARE they did not apply the illegal suelo. I had a mortgage with them myself and it was certainly never in my own mortgage deed. What they did do to protect themselves was state that if European Central Bank interest rates ever fell below zero it would be assumed that their margin above EURIBOR would be applied to an assumed zero rate so in spite of ECB being at a negative then 0% would be an assumed base rate. In my opinion this is  fair otherwise if taken to an extreme and rates reached a ludicrously discounted level they might have ended up paying me money to borrow.

It is not Halifax UKs problem as Halifax Hispania was autonomous from Halifax UK and I can assure you that Sabadell as a bank are most definitely aware of the illegal clause (this was usually set at a rate of about 2.5% subject to the bank) as they have had their own legal challenges to fight plus plenty that were written in Solbanks name from when they absorbed Solbank.

If someone at Sabadell is telling you they know nothing about the clause they have either only just joined the bank, know nothing about mortgages (whats new with general branch staff?), or they are deliberately putting their head in the sand.....or perhaps a combination of the three.

As to changing to another bank - I am not sure how this constitutes mis-selling because I dont see any reason why you cannot remortgage if the equity is in the property and it is good loan to value in light of current market - however what might deter you is the costs of moving which are usually in the region of 6 to 7% of the loan advance as taxes, Notary land registry fees all have to be paid all over again.      

So good to see you Smiley!

Thank you Maria. I pop in from time to time to offer my humble opinion when someone asks a mortgage related question. I trust that all is well with you and your family